Introductio This paper aims at informing EU businesses in the offshore wind sector about the supply chain for a potential osffhore wind sector in India. In particular, technical solutions from EU businesses could be instrumental in establishing the -rst projects, and an expanding o-shore wind sector in India could present key opportunities for these businesses. This document seeks to strengthen the dialogue between both European and Indian businesses and help EU companies expand and diversify into the Indian market, and add to the basis of EU-wide advocacy efforts by EU member states, EU business
organisations and businesses, to contribute towards the removal of trade barriers and to identify regulatory and economic trends with a focus on the needs of EU SMEs. It is hoped that this study can contribute to the development of technical and business solutions, that would support development of the industry from the frst tender of 1 GW, to 5 GW by 2022, and 30 GW by 2030 The scale and speed of such pipeline is immense in size and ambition, and such a project pipeline has great potential to attract the needed investments, economies of scale and supply chain development necessary for competitive prices. In the development of an Indian oshore wind industry, it is expected that early developers will use to a large extent the existing offshore wind supply chains built over the course of
the last two decades during Europe’s offshore wind buildout. This extensive global supply chain to meet EU demand has developed gradually over that time period to develop the 22 GW1 which is substantially
less than the current Indian ambitions discussed here. Thus, it is envisioned that a high degree of localization and further development of the supply chain will occur in India, supported by both international players from mature markets partnering with Indian businesses and transfer knowledge.
Current Offshore Market State in India the EoI, SECI11 signed an agreement with the
India has one of the fastest growing economies in the world and, in order to meet with rising energy needs, new generation capacity must be implemented on a regular basis. India has been very successful in shepherding renewable energy into its energy mix, and today over 35 GW of onshore wind power
contributes to the Indian energy supply system. This number is rapidly rising, and 60 GW is targeted to be installed in India by 2022. In Europe, offshore and onshore wind both are important contributors to the regional sustainable energy mix. The total offshore wind farm installed apacity has now surpassed 20 GW and numbers are continuously rising, with more countries such as China, USA and Taiwan also developing and installing offshore wind farms. The last twenty years have seen tremendous investments by European governments and private industry in order to develop the needed infrastructure and supply chains to support the build-out of the frst 20 GW of offshore wind. This has resulted in a truly global industry and supply chain, bringing along with it tremendous economies of scale and learnings that have seen prices plummet. In contrast to this, India has recently published its EoI3 for the frst 1 GW of offshore wind farm in India (Gujarat) in mid-2018, and MNRE has made an announcement4 of ambitious offshore wind deployment goals to develop 30 GW by 2030 in Indian waters. Development on this scale will require European developers and suppliers seek to export their successes to India, however, they will initially face some development and supply chain challenges. Project developers will frst need to align with new business partners, face new and untested permitting and approval schemes5 that may add delays and increased uncertainty to their projects, making the overall costs higher at the start. However, the scale of India’s ambitions, will attract mature developers who will gradually be able to translate their lessons learned in the design, manufacture, installation and O&M of offshore wind farms, leading to lower prices over the medium term. India already has a robust and mature onshore wind industry and has learned the lessons of how to incorporate a signifcant share of renewable energy
into its national energy mix. With over 34 GW of installed onshore wind energy capacity, India ranks as
the fourth-largest producer of wind power worldwide. With a potential total of further 70 GW6 of offshore wind energy capacity, the country has the potential to develop another thriving renewable
industry offshore. In 2013 the FOWIND7 project, initiated by a consortium led by the Global Wind
Energy Council (GWEC), and the FOWPI pilot8 identifed several main development areas along the
west coast and southern tip of India with a special focus along the coasts of Tamil Nadu and Gujarat. These areas represent the lowest hanging fruit for offshore wind development in India currently.
Supply Chain Status-quo and Outlook
Outlook for the domestic market India faces a number of challenges in setting up a new offshore wind industry; however, the opportunities are great as well.
Challenges Project pipeline and approval process The largest obstacle to building a strong, local supply
chain is the development and firm commitments to a pipeline of offshore wind projects in India. Currently, a large onshore wind industry has developed in the country, representing over 35 GW of installed capacity13, and there is a strong domestic supply chain related for these activities. Offshore wind farm development is a notoriously difcult logistics exercise, and the larger the pipeline, the more sense it makes to source as much as possible locally.
Manufacturing In terms of local supply chain build up, it can only be expected that a local supply chain will progressively emerge as result of investments that are made as the market matures and a multi-GW pipeline consolidates. The offshore wind sector will beneft from the Indian offshore oil & gas industry, which has evolved to handle the entire EPC value chain of large projects. Companies such as Larsen and Toubro, OHCS India, and Param Ofshore Services have participated in various development and redevelopments of the Mumbai High oil feld and have experience in offshore construction and logistics that is directly translatable to offshore wind activity. This also applies to Indian players with vast experience in the maritime infrastructure sector like the ALAR group, who have followed the developments in offshore wind in India closely and are willing to translate their maritime know-how to the offshore wind sector. While experience from other countries shows that building local manufacturing capacities takes time and lowest costs of energy are driven by allowing the market to
freely meet the pipeline demand based on both local and global supply chains, there is tremendous opportunity for Indian companies to capture manufacturing and general supply chain opportunities in a number of key areas. These areas are broadly outlined in Figure 2.
Offshore Wind Supply Chain Analysis
Supply Chain Categories The following section explores the key elements and components required for developing a future offshore industry in India. Each category of the needed supply chain is presented, along with some key subcomponents and their relevant international and local providers are listed. In addition, the current market state-of-play is described along with expected upcoming developments. While project development tasks and survey activities are paramount for establishing a robust wind farm design and realizing a low LCOE, DEVEX costs account for around 2% of the total project costs as shown in Figure 4. Hence, capturing most of the project value in India relies on capturing other aspects of the project, e.g., manufacturing and installation. Developing the Indian supply chain must therefore consider the breakdown of CAPEX costs: WTGs (26%), Balance of plant (20% including foundations and infrastructure), as well Installation & commissioning tasks (14%) and O&M Services (40%).
Installation Vessels& Ports The installation of a wind farm requires a wide variety of vessels, each of them with a specifc design and purpose. Broadly speaking, the technical design can be split into the following vessel types: Heavy-lift vessels combined with working barges, jack-up barges without propulsion and self-propelled jack-up vessels. From the point of view of construction, these vessels serve the purpose of installing the turbine foundations, subsequently the turbines, the IAC and export cabling and the offshore substation. After completion of construction and commissioning, further vessels are involved, which will be discussed in the O&M chapter. The ports involved in the construction need to comply with specifc requirements in order to accommodate the accordingtype of vessels.
Foundation installation vessels These vessels frst transport the foundations to the site and then execute the specifc installation process depending on the foundation type (e.g. piling for monopiles. These tasks are usually performed by either foating heavy lift vessels and sheerleg crane vessels (in combination with an additional component feeding vessel) or by jack-up vessels, which are mainly used for wind turbine installation. Monopile installation has been performed by a variety of vessels, e.g. heavy lift vessels like Seaways “Stanislav Yudin”, crane vessels like VanOord’s “Svanen” or jack-up vessels like “Aeolus”. While the Indian O&G industry already presents availability of foating installation vessels for standard monopiles of up to 7.5 m in diameter, it lacks vessels necessary for any application of larger diameter monopiles (i.e. XL monopiles), which require cranes with a lifting capacity greater than 1200t. For these cases, further investments would be necessary. The same market challenge also applies to transport and installation of jacket foundations. In principle the installation of single jackets is already possible through the vessels of the mature Indian O&G industry. However, these would require feeding the components by another jack-up, which would turn economically unfeasible due to the high charter rate of these vessels.
Conclusions With its 7200 km of coastline, high energy demand and favorable wind conditions, India presents a promising landscape for its ambitious plans to develop 30 GW of offshore wind energy by 2030. Ofsfhore wind energy has evolved into a highly specialized, large-scale industry, and the local
establishment of such an industry is a gradual process that will take several years to develop and will initially rely heavily on the know-how and support of supply by European companies. The supply chain required to construct an offshore wind farms on this scale is huge, and both European and Indian companies will potentially encounterlarge business opportunities in the country. However, given the size of the key elements of such a supply chain, businesses looking to enter the offshore wind market will also need to commit to major investments in order to pursue the targeted local industry development. In order to minimize the risk of investment for foreign companies entering India, but also for Indian businesses shifting from established sectors into the offshore market, a reliable regulatory framework will be essential. Currently, MNRE has planned national goals calling for an immediate increase in offshore wind for the next ten years, resulting in up to 30GW. Its recent EoI has also brought India’s potential under international attention, showing indication of potential success for European and Indian eforts. NIWE at the same time is carefully setting the scene and the necessary framework to kick-start the industry in an efective and well-structured manner, by supporting the government in its regulatory, environmental, and logistical issues. SECIs expansion to cover not only solar but all renewables including offshore wind,has enabled the company to act as contract holder andfguarantee providerfor the frst offshore wind project and will further drive the development in the right direction.
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